Step 1: Preheat your oven to 350°F (175°C). Spread 1 cup of shredded coconut on a baking sheet and toast for 5-7 minutes, stirring occasionally, until golden brown and fragrant. Set aside ½ cup for the crust and ½ cup for garnish. Let cool completely.
Step 2: For the crust, in a large bowl, combine the all-purpose flour, powdered sugar, the reserved ½ cup toasted coconut, and salt. Pour in the melted unsalted butter and mix until well combined and crumbly.
Step 3: Press the crust mixture firmly and evenly into the bottom of a 9x13 inch baking dish. Bake for 15 minutes, then remove from oven and let cool completely on a wire rack.
Step 4: For the cream cheese layer, in a large mixing bowl, beat the softened cream cheese, granulated sugar, and vanilla extract with an electric mixer until smooth and creamy. Gently fold in one 8-ounce container of thawed whipped topping until just combined. Spread this mixture evenly over the cooled crust.
Step 5: For the pudding layer, in a separate bowl, whisk together the instant vanilla pudding mix and cold milk for 2 minutes until thickened. Carefully spread the pudding layer over the cream cheese layer.
Step 6: Gently spread the second 8-ounce container of thawed whipped topping over the pudding layer.
Step 7: Sprinkle the remaining ½ cup of toasted coconut over the top for garnish.
Step 8: Cover the dish and refrigerate for at least 4 hours, or preferably overnight, to allow the layers to set completely before slicing and serving.